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August 4th, 2010

Five States Get $600M to Help Homeowners

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Back in February, it was the five hardest-hit states — Arizona, California, Florida, Michigan and Nevada — that got federal money to help repair their housing markets. (You can click here to get a full breakdown of how much they got and how they plan on spending it).

Today, the Treasury Department approved plans submitted by five additional states — North Carolina, Ohio, Oregon, Rhode Island and South Carolina — for $600 million in funding to prop up their beleaguered housing markets:

In the latest package of aid, Ohio will receive $172 million — the largest amount of money. That could aid around 15,000 homeowners by helping borrowers pay their mortgage for up to a year while they search for jobs. It could also provide incentives for mortgage companies to reduce borrowers’ mortgage balances.

North Carolina is receiving $159 million, and South Carolina is in line for $138 million. Oregon is receiving $88 million and Rhode Island is receiving $43 million.

What is it about these five states (10 altogether) and the housing stabilization plans they have submitted to the White House that sets them apart from others?

“These states have designed targeted programs with the potential to make a real difference in the lives of homeowners struggling to make their mortgage payments because of unemployment,” Herbert Allison, an assistant treasury secretary, said in a statement.

When the White House first announced their plans to target specific states with federal funding, they identified states where high unemployment was particularly hampering their housing markets and their potential recovery.

I anticipate that the Housing Finance Agencies of North Carolina, Ohio, Oregon, Rhode Island and South Carolina have submitted similar plans and strategies to help their struggling homeowners as the “original five” submitted. I expect each state to allocate at least some of their funding to providing principal reductions for underwater borrowers, subsidized mortgage payments for the unemployed as well as money for foreclosed borrowers to occupy and maintain the homes until they’re resold.

READERS: If any of you live in these five (or ten) states that are receiving this federal aid, let us know if it’s helping or not helping you and your family.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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